Richard Grogan: Redundancy or continuity of service?

Case ADJ-12161 dealt with an interesting issue. The facts are relevant.

The complainant worked as a steel fixer for the respondent company from 4 May 2015 to 19 May 2017, earning €700 net per week.

The complainant outlined that his employment was transferred to an agency on 19 May 2017. The employment terminated on 11 August 2017. The employee applied for a lump sum redundancy payment from the respondent company who have been, if we can call it like this, the first employer.

The employer in this case contended that the employee was offered new employment but refused it. The respondent submitted that there was no cessation of employment to justify a claim for redundancy. The employer contended that the employee has gone from the respondent to an agency following a period of lay off followed without an application for Jobseeker’s Benefit (JB) and that he resigned from employment during the period of lay off which contravened the protection contained in section 12 of the Redundancy Payment Acts.

The AO in this case looked at a situation where the employer contended that the employee had transferred seamlessly to the agency.

The AO in this case looked at section 9(3) of the legislation which provides that an employee shall not be treated for the purposes of this part as having been dismissed if:

He is re-engaged by another employer immediately on the termination of his previous employment. That would appear to have happened.

The re-engagement takes place with the agreement of the employee, the previous employer and the new employer. There was an issue in the case as to whether this actually occurred, but let us for argument’s sake say that it did.

Before the commencement of the period of employment with the new employer, the employee receives a statement in writing on behalf of the previous employer and the new employer which:

Sets out the terms and conditions of the employee’s contract of employment with the new employer;

Specifies that the employee’s period of service with the previous employer will, for the purposes of this Act, being the Redundancy Payment Acts, be regarded by the new employer as service with the new employer;

Contains statement as mentioned in (b) above;

That the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph.

What is clear is that this did not occur.

In this case, only a P45 issued. If there is to be a transfer to avoid the claim by an employee bringing a claim under the Redundancy Payment Acts, then all of these conditions in section 9(3) of the Redundancy Payment Acts must be complied with. Where they are not, as it was found in this particular case, the employee is entitled to redundancy - in this case, from the time that he started with the respondent employer up to the date his employment transferred to the agency.

This is a particularly important decision from the AO and for those interested in redundancy law, this is an excellent decision to read.

Richard Grogan is the principal solicitor at Richard Grogan & Associates Solicitors. You can subscribe to the firm’s monthly newsletter at grogansolicitors.ie.